Author(s): José Viñals, IMF
Date published: Sep 2009
Keeping with SUERF tradition, the Colloquium concluded with the Marjolin Lecture. The 2009 Marjolin Lecture “On Monetary and Financial Stability – Past, Present and Future” was given by José Viñals, Financial Counsellor and Director, Monetary and Capital Markets Department, IMF. Two years ago, according to the speaker, most observers were happy with what we had. Infl ation was low and stable and few questioned the independence of central banks. We thought we had achieved fi nancial stability. Monetary policy had clear objectives. There was very little debate on financial stability instruments. Then the crisis came. It shattered the belief that we had achieved fi nancial stability. It turned out that micro prudential supervision was bad and that macro prudential supervision was missing. Liquidity risks were not paid attention to. Monetary policy was not the cause of the crisis but a facilitating factor. We are still in a crisis so monetary conditions should be kept easy. Central bank balances, however, have to be brought down. Measures should be taken that do not impair the independence of central banks. The increase in Government debt means higher debt service in the future. Fiscal consolidation is absolutely indispensable. Excessive cyclicality in the fi nancial sector should be reduced. Rules and discretion should be combined. We must ensure that systemic important institutions build up contingency reserves in good times so that they can carry losses in bad times. Supervisory systems should be enforced. The Marjolin speaker concluded by expressing the hope that the reform agenda will succeed in the future.